Major rating agency concerned over Thailand’s rice pledging scheme

BANGKOK, July 16 – Leading global credit rating agency Moody’s Investor Services urged the Thai government to ensure that its rice pledging policy would not overburden the state coffers.

Speaking to reporters after meeting with Moody’s executives today, Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong said Moody’s sought details about the government’s rice pledging scheme. They also asked the government not to overspend its budget for the scheme.

Mr Kittiratt said he assured Moody’s that the government’s rice pledging policy implementation would not cause a heavy burden on state coffers given that the budget has already been allocated and there are cash flows from the release of government’s rice stockpiles.

The deputy prime minister asserted the government would achieve a balanced budget as targetted in 2017 while budget deficit has been gradually reducing since last year.

The government would go ahead with its Bt-2 trillion mega infrastructure project and public debt would not exceed 50 per cent of the country’s gross domestic product (GDP), Mr Kittiratt said.

He added that the government has no additional economic stimulus and once the Bt2-trillion mega project and Bt350 billion water management plan get off the ground, they will help stimulate the economy.

Moody’s also expressed concern over rising household debt which Mr Kittiratt said commercial banks as major lenders would take care of the matter even though major debt partially incurred by the government’s first-time car buyer and home-buyer schemes.

He added that state lending mainly involved dealing with accumulated debt owed to loan sharks and that benefits people.